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Person with terminal illness, a public sector teacher, still working, must decide how to configure retirement distribution for benificiaries. If person dies while in service a distribution "X" is awarded to beneficiaries.

If person goes on retirement disability before passing, then beneficiares get either the regular disability payments "P" or a lump sum "Y" which is 3 to 4 times "X". If person just plain retires, then beneficiaries get nothing.


What are the tax consequences for the estate and the beneficiary for either "X", "Y" and "P"?

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